By K Raveendran
Prime Minister Narendra Modi’s visit to Russia holds significant implications for the economic partnership between the two countries, spanning various sectors from energy to technology and beyond. As such, it is a pivotal moment for both countries, especially against the backdrop of evolving global dynamics and their mutual interests in enhancing economic ties.
Central to the discussions during Prime Minister Modi’s visit is the deepening of economic cooperation between the two countries. Historically, the relationship has been characterized by robust collaborations in defence and space exploration. However, in recent years, both nations have increasingly focused on expanding their economic engagement, leveraging each other’s strengths for mutual benefit.
Energy cooperation remains a cornerstone of economic relationship. Russia, endowed with extensive natural resources, including vast reserves of oil and natural gas, presents a reliable partner for India’s energy security needs. Discussions during the visit are likely to revolve around enhancing cooperation in oil and gas exploration, production, and refining. Joint ventures such as the Sakhalin-1 project exemplify successful collaborations that contribute significantly to India’s energy security strategy.
Furthermore, with global attention increasingly shifting towards renewable energy sources, discussions may also encompass potential partnerships in renewable energy projects. Russia’s expertise in nuclear energy and India’s ambitious renewable energy targets present opportunities for collaboration in areas such as solar, wind, and hydroelectric power.
Beyond energy, the visit aims to strengthen bilateral trade and investment ties across diverse sectors. Both countries have expressed interest in diversifying their trade basket beyond traditional sectors like defence and pharmaceuticals. Key sectors of interest include agriculture, manufacturing, information technology, and infrastructure development. Efforts to streamline trade logistics, reduce tariff barriers, and address regulatory issues are crucial to enhancing bilateral trade volumes and economic cooperation.
Investment is another critical aspect of the discussions. Russian investment in India, particularly in sectors such as steel, mining, and energy, has been significant. Indian companies, in turn, have shown increasing interest in sectors like pharmaceuticals, IT, and automotive manufacturing in Russia. Discussions during the visit may focus on creating a conducive environment for investments, addressing concerns related to taxation, legal frameworks, and bureaucratic hurdles.
Moreover, enhancing connectivity between India and Russia is pivotal for facilitating trade and investment flows. Improving air, sea, and land connectivity, as well as streamlining visa procedures for business travellers and tourists, can foster greater economic engagement. Strategic infrastructure projects, such as the International North-South Transport Corridor (INSTC), which aims to create a multimodal transport network linking India, Iran, Azerbaijan, and Russia, could also be a topic of discussion.
Financial cooperation is another area of interest. Discussions on currency swaps, banking ties, and collaboration between financial institutions could facilitate smoother financial transactions and investment flows between the two countries. Strengthening financial cooperation is essential for supporting large-scale infrastructure projects and promoting economic growth.
Modi’s visit underscores India’s commitment to maintaining a balanced foreign policy approach and diversifying its economic partnerships amidst global uncertainties. By deepening economic ties with Russia, India aims to ensure stability in its energy supplies, expand market access for its goods and services, and tap into Russia’s technological capabilities.
India is keen to reassure Moscow regarding a potential shift in India’s policy, especially in view of New Delhi moving closer to Washington in terms of economic and technological cooperation. India had played a key role in enabling Russia to dodge western sanctions in the wake of the Ukraine war. India, along with China rescued Russia from a financial meltdown and international isolation. New Delhi has made it clear to western capitals that India’s energy cooperation with Russia, which has in effect made a shift in the country’s energy purchases, is in self-interest and has defended its policy, which is in contravention of western sanctions. Western nations, particularly Washington, have reconciled themselves to India’s position and Modi’s visit is particularly significant from this point of view. (IPA Service)
